- Biotech and healthcare stocks are loved by traders for their big price moves, which usually happen when a company makes progress (or faces problems) with their developmental products like drugs and devices. Results from Phase I, II and III clinical studies, and FDA or European approvals (and rejections), can send stocks soaring.
- Everyone is familiar with these monster moves. Recent examples include Amarin Corp's (AMRN) 3X move in one day, or Zosano Pharma Corporations' (ZSAN) 100% rip on recent study results. Now, a new entrant in the large neurological market, NeuroOne Medical Technologies (NMTC), could be on the eve of their first FDA approval, and few investors are paying attention to this small company because it's so new and quiet about what they're doing.
- Nevertheless, NMTC is 10% owned by the Mayo Clinic and has a stable of veteran physicians and researchers on their board and advisory board. With the possibility of two FDA clearances in 2019 for their first planned medical devices, the company could have a breakout year if they execute and move from unknown to mainstream.
NEW YORK, NY / ACCESSWIRE / February 22, 2019 / Small healthcare stocks are known for making heroic moves, often when their development-phase drugs or devices move closer to going commercial. Completion of Phase I, II, and III trials can all send stocks rallying, as can approvals from European and U.S. regulators.
Case in point, Zosano Pharma's (ZSAN) recent monster 100% move recently when they announced success in a Trial of their drug for migraines. Amarin Corp (AMRN) saw their stock price triple after their drug Vascepa succeeded in a large Phase III study.
The largest moves tend to happen when most investors aren't paying much attention, and that could be the setup for a newer neuro company that recently made their way to the public markets. NeuroOne Medical Technologies (NMTC) is a small developer of electrode technology that just quietly submitted their first product to the U.S. FDA for a possible clearance early in 2019. NeuroOne's technologies - sometimes known as ''neurostimulation'' devices - have been tested at the Mayo Clinic, which is also a 10% owner of the company's public stock. Now that the company is headed towards their first possible FDA clearance, and with a second possible clearance for another device right on its heels, NMTC is a healthcare company to be aware of before it gets discovered.
NeuroOne Operates In An $8B And Growing Device Market
The emerging field of neurostimulation refers to technologies that electrically stimulate or monitor the nervous system to treat and diagnose disorders. Though humans have learned much about the nervous system in the last twenty years, it remains a mysterious organ and technology has only recently begun to unlock some new treatment options. These devices are now helping in a variety of difficult neurological disorders, like Parkinson's Disease, Dystonia, Epilepsy and even in the treatment of pain and some nerve damage.
It's an exciting time as this industry takes off. In 2019 the research firm Global Markets Insights expect this to be a $8.196 billion industry across the globe, and $6.5 billion in North America and Europe alone.
One of the earliest successes for neurostimulation devices was in Epilepsy and Parkinson's using Deep Brain Stimulation, or DBS and ablation. After identifying brain tissue that may be causing Epileptic seizures or movement problems as in severe Parkinson's, neurologists can selectively modulate or destroy this tissue with a DBS or ablation device, reducing or sometimes eliminating symptoms of the disorder. In fact, ablation can cure about 50% of Epileptic patients.
The hangup for many Parkinson's, Dystonia, or Epilepsy patients who are eligible for DBS or ablation is the traumatic surgical requirements, not only for treatment but also to diagnose and pinpoint the affecting brain tissue. It can take weeks in the hospital, sometimes with wires protruding from a patient's skull!
Here's where NeuroOne hopes to make its mark on the industry. The company's initial devices are high-fidelity electrodes designed to enhance and possibly shorten this diagnostic/treatment process. These thin-film electrodes, used in a procedure called an EEG (electroencephalogram), may provide more accurate detection of irregular brain activity over currently available technology. In limited clinical testing so far, doctors at the Mayo Clinic have been able to document pre-seizure activity (called micro-seizures) during clinical research with their patients using NeuroOne's technology. The electrodes are being developed as strips and depth electrodes, and they've already demonstrated an improvement in inflammatory response compared to existing products when used on some brain tissue. With better diagnostic process, NeuroOne hopes that their products can shorten the diagnostic time and improve safey for Epileptics and patients suffering from movement disorders.
Combined, this first technology addresses a demand for improved diagnostic options among neurologists, and NeuroOne is now racing to market with their first medical devices for approval.
NMTC Quietly Made Their First FDA Clearance Application
NeuroOne has been mostly quiet on the investor front, but in a recent SEC filing they revealed that they filed their first Food and Drug Administration (FDA) 510(k) application on January 28, 2019. The application covers their cortical and strip electrodes for temporary (less than 30 day) use with recording, monitoring, and acute stimulation equipment for the recording, monitoring and stimulation of electrical signals on the surface of the brain.
In the case of this 510(k) process, which is used when the device holds a low risk to the patient, the FDA will aim to complete its review within 90 days of receiving the notification.
This is the biggest gating event for NeuroOne since the company went public, and it could take them from a development stage company to commercial and their first revenue. An FDA clearance could launch the into the mainstream of healthcare companies, and investors will undoubtedly take notice of this tiny company.
The company also plans to file a FDA 510(k) marketing clearance for their first depth electrode during the second quarter. Following that, they're working on a unique diagnostic/ablation device that could further shorten and simplify the treatment time for patients.
NMTC could have two value-driving events in the next 5-6 months, and the markets are barely paying attention.
Strong Advisory Board Backs NeuroOne, And Mayo Owns 10% Of The Company
The breadth of expertise involved in NeuroOne is impressive. The company has strong advisors and executives, and their technology has been tested over the years by both the Wisconsin Alumni Research Foundation and the Mayo Clinic, the latter of which is also a 10% holder of NMTC's public stock.
Since going public, NeuroOne has been building a team of experienced medical tech and neurology advisory members: Mayo Clinic's Greg Worrell MD, PhD and Gregory J. Esper, MD, MBA of Emory University both sit on the company's scientific advisory board. More recently, Dr. Kip Ludwig, former Program Director for Neural Engineering at the NIH, became chair of the company's new "artificial intelligence" advisory board, which will focus on deploying NeuroOne's electrode technology in artificial intelligence and bioelectronics applications. Dr. Cristin Welle of the Univ. of Colorado joined, a founder of the Neural Interfaces Program at the FDA's Center for Devices and Radiological Health Office of Science and Engineering Labs; plus Dr. Doug Weber, a Program Manager in the Biological Technologies Office (BTO) at DARPA.
Evaluating AI opens up some unique possible opportunities as more researchers have considered the potential for electrode/brain interfaces. The possibility for some kind of translational work in this space is intriguing.
2019 Should Be A Big Year For NMTC Shareholders
NeuroOne has been operating in stealth mode for the last year, but 2019 could be when investors start to pay attention. The company will likely have 2 FDA clearances in the next 6 months if the FDA signs off on their cortical and depth electrode 510(k) filings. As this stock has been mostly flat since going public, these events may be the first time that investors stand up and take notice. Additionally, NMTC plans to apply for a listing on the Nasdaq, another catalyst that could create significant value for shareholders if NMTC can qualify. With CEO Dave Rosa's successful track record building venture stage healthcare companies, multiple value creating catalysts on the horizon, and an awesome technology with blue sky potential, investors long NMTC could be handsomely rewarded for a patient long position in this relatively unknown healthcare company.
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One Equity Stocks is a provider of paid-for research on publicly traded emerging growth companies. This is an advertisement. We are not a licensed broker-dealer and do not publish investment advice and remind readers that investing, especially in penny stocks, involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for-profit business and is usually compensated for coverage of issuers we cover as well as other advisory work we perform. Although we always strive to be objective, you should assume we are biased because of the financial relationship we have with companies we write about. We have an advisory relationship with Neuro One Medical and have received 250,000 shares of restricted stock from NMTC for advisory services including this advertisement. We are also reimbursed for actual expenses we incur related to the provision of advisory services. We may receive additional compensation in the future and if so we are unable to update this disclosure. Please contact us at email@example.com for additional information or to subscribe to our intelligence service.
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